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1. Calculate the Accounts Receivable Collection Period & Accounts Payable Payment Period based on the data given above

1. Calculate the Accounts Receivable Collection Period & Accounts Payable Payment Period based on the data given above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Request for help with calculation of Accounts Receivable Collection period and Accounts Payable Payment Period based on the details mentioned in the question attached

Given the following Income Statement & Financial Position of Anne York, a sole trader who started the business of buying and selling furniture in Brighton Anne York 1st of October 2021 Balance Sheet October 31, 2021 Anne York Assets Income Statement Current Assets: For the Month Ended October 31, 2021 Bank 9,230 Sales Revenue 5,600 Cash 6,140 Cost of Goods Sold 4,830 Accounts Receivable 150 Gross Profit 770 Inventory 320 Operating Expenses: Керair Expense Wages Expense Rent Expense Total Current Assets 15,840 110 820 Property Plant & Equipment: 850 Flat 45,000 Hotel Expense 1,200 Car 12,000 Total Operating Expenses 2,980 Computer 800 Income/ (Loss) -f 2,210 Printer 200 Other Income: Laptop 1,700 £ 59,700 Rent Revenue 800 Total Assets 75,540 Net Income/ (Loss) |-£ 1,410 Liabilities and Owner's Equity Current Liabilities: Accounts Payable 5,150 Owner's Equity: Anne York, Capital £ 70,390 Total Liabilities and Owner's Equity 75,540 Also given the jounal entry Anne York Journal Entries Date Accounts Title Debit Credit Oct 1 Bank £ 10,000 Cash 4,800 Flat 45,000 Car 12,000 Anne York, Capital 71,800 (To record capital contributed in the business) Inventory Accounts Payable Oct 2 5,400 5,400 (To record furniture purchased on account) Oct 4 Computer 800 Printer 200 Bank 1,000 (To record computer and printer purchased) Oct 5 Bank 2,800 Sales Revenue 2,800 (To record sales revenue earned in cash) Oct 12 Repair Expense 110 Cash £ 110 (To record repair expense incurred) Oct 18 Accounts Payable 250 Inventory £ 250 (To record furniture returned on account) Oct 21 Bank 800 Rent Revenue 800 (To record rent revenue earned) Oct 23 Accounts Receivable 300 Cash £ 1,800 Sales Revenue £ 2,100 (To record sales revenue earned on account) Oct 23 Cash 700 Sales Revenue 700 (To record sales revenue earned in cash) Oct 24 Laptop Bank 1,700 £ 1,700 (To record Laptop Purchased) Oct 26 Wages Expense 820 Bank £ 820 (To record wages expense incurred) Oct 30 Rent Expense £ 850 Bank 850 (To record rent expense incurred) Oct 31 Hotel Expense Cash £ 1,200 1,200 (To record hotel expense incurred) Oct 31 Cash 150 Accounts Receivable 150 (To record amount received on account) Oct 31 Cost of Goods Sold £ 4,830 Inventory 4,830 (To record cost of Goods sold incurred) The ratios for Anne's business for October 2021 are as calculated below - Net Profit Gross Profit Current Acid Test Accounts Accounts Margin Margin Ratio Ratio receivable payable collection рayment period period Year 2021 -0.25 0.14 3.08 3.01 1. Calculate the Accounts Receivable Collection Period & Accounts Payable Payment Period based on the data given above
Transcribed Image Text:Given the following Income Statement & Financial Position of Anne York, a sole trader who started the business of buying and selling furniture in Brighton Anne York 1st of October 2021 Balance Sheet October 31, 2021 Anne York Assets Income Statement Current Assets: For the Month Ended October 31, 2021 Bank 9,230 Sales Revenue 5,600 Cash 6,140 Cost of Goods Sold 4,830 Accounts Receivable 150 Gross Profit 770 Inventory 320 Operating Expenses: Керair Expense Wages Expense Rent Expense Total Current Assets 15,840 110 820 Property Plant & Equipment: 850 Flat 45,000 Hotel Expense 1,200 Car 12,000 Total Operating Expenses 2,980 Computer 800 Income/ (Loss) -f 2,210 Printer 200 Other Income: Laptop 1,700 £ 59,700 Rent Revenue 800 Total Assets 75,540 Net Income/ (Loss) |-£ 1,410 Liabilities and Owner's Equity Current Liabilities: Accounts Payable 5,150 Owner's Equity: Anne York, Capital £ 70,390 Total Liabilities and Owner's Equity 75,540 Also given the jounal entry Anne York Journal Entries Date Accounts Title Debit Credit Oct 1 Bank £ 10,000 Cash 4,800 Flat 45,000 Car 12,000 Anne York, Capital 71,800 (To record capital contributed in the business) Inventory Accounts Payable Oct 2 5,400 5,400 (To record furniture purchased on account) Oct 4 Computer 800 Printer 200 Bank 1,000 (To record computer and printer purchased) Oct 5 Bank 2,800 Sales Revenue 2,800 (To record sales revenue earned in cash) Oct 12 Repair Expense 110 Cash £ 110 (To record repair expense incurred) Oct 18 Accounts Payable 250 Inventory £ 250 (To record furniture returned on account) Oct 21 Bank 800 Rent Revenue 800 (To record rent revenue earned) Oct 23 Accounts Receivable 300 Cash £ 1,800 Sales Revenue £ 2,100 (To record sales revenue earned on account) Oct 23 Cash 700 Sales Revenue 700 (To record sales revenue earned in cash) Oct 24 Laptop Bank 1,700 £ 1,700 (To record Laptop Purchased) Oct 26 Wages Expense 820 Bank £ 820 (To record wages expense incurred) Oct 30 Rent Expense £ 850 Bank 850 (To record rent expense incurred) Oct 31 Hotel Expense Cash £ 1,200 1,200 (To record hotel expense incurred) Oct 31 Cash 150 Accounts Receivable 150 (To record amount received on account) Oct 31 Cost of Goods Sold £ 4,830 Inventory 4,830 (To record cost of Goods sold incurred) The ratios for Anne's business for October 2021 are as calculated below - Net Profit Gross Profit Current Acid Test Accounts Accounts Margin Margin Ratio Ratio receivable payable collection рayment period period Year 2021 -0.25 0.14 3.08 3.01 1. Calculate the Accounts Receivable Collection Period & Accounts Payable Payment Period based on the data given above
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